AUSTRAC,AFP need to interrogate Ashok Ramamurthy ,ANZ about their role in the 1 MDB-Bandar Malaysia laundering scheme

AMMB Holdings group managing director Ashok Ramamurthy (Left) and chief financial officer Mandy Simpson (Right) - LOW LAY PHON/THE STAR (filepic)

by Ganesh Sahathevan

The Malaysian newspaper reports and official statement from the scandal ridden 1 MDB summarize the facts, well documented and available in the public domain, about a RM 2 billion loan ANZ/AMMB provided 1 MDB's wholly-owned subsidiary Bandar Malaysia;  but which was not used for the declared purpose.It was instead siphoned out of that company into various off-shore accounts. That any Malaysian bank, let alone AMMB which is effectively under ANZ's management, would not be aware of how such a large loan was utilized is inconceivable. 

The loan was extended when ANZ's Ashok Ramamurthy was CEO (on secondment ) at ANZ/AMMB. Ramamurthy returned to ANZ's HQ under a cloud, even as AMMB insisted that his return had nothing to do with 1 MDB. That bald denial means nothing given the avalanche of contradictory statements from 1 MDB and documents that keep finding their way into the public domain.

The AFP and AUSTRAC appear uninterested in  investigating the matter of ANZ's involvement in this international laundering scheme. However ,the matter is  already the subject of a multi-jurisdictional investigation,and the AFP and AUSTRAC cannot pretend the matter is of no concern to Australia forever. At some point, probably very soon, reality will bite.

Ashok Ramamurthy would be a good place to start, given that he is now in Melbourne. The ANZ board led by David Gonski should also be pursued;they do bear ultimate responsibility for this multi-billion dollar scam.

END 

Malaysia

Amid lack of progress in Bandar Malaysia, Rafizi questions 1MDB’s RM3.5b debt

BY JOSEPH SIPALAN
MAY 12, 2015
UPDATED: MAY 12, 2015 02:18 PM

KUALA LUMPUR, May 12 — Putrajaya must explain what happened to some RM3.5 billion in funds raised by 1Malaysia Development Berhad through loans and Islamic bonds over the past four years for its Bandar Malaysia project, when there has not been any visible progress in the ambitious development, a PKR lawmaker said today.

Pandan MP Rafizi Ramli claimed that 1MDB had secured a RM2 billion loan from AmBank and issued RM1.5 billion in sukuk bonds privately to Lembaga Tabung Haji (LTH) and Permodalan Nasional Berhad (PNB) to fund the development of Bandar Malaysia in Sungai Besi.

This includes the relocation of military facilities from the existing air force base to other locations in the country, but Rafizi said there has hardly been any movement.

"The first phase (of the project) is to relocate military facilities. To how many locations we don't know, but we probably only can confirm that the main camp will go to Sendayan in Negri Sembilan," he said at a news conference here.

"But if you go to Sungai Besi now, it (air force base) is still there. Hardly anything has happened," he added.

In June 2011, 1MDB signed several agreements with the federal land commissioner to take over ownership of the Sungai Besi airport land and with the Negri Sembilan state government to acquire land in Sendayan as the replacement site for the Royal Malaysian Air Force base.

The agreements were to pave the way for the development of Bandar Malaysia, which 1MDB claimed will have “attractive elements” to “promote livability as a distinctive character of Greater Kuala Lumpur”.

The Bandar Malaysia masterplan presents a mixed development focussed on promoting work/life balance with the inclusion of open green spaces, a “people’s avenue” and higher learning institutes.

Rafizi today claimed that LTH and PNB had entered a “high-risk” investment by subscribing to the RM1.5 billion in sukuk bonds issued by 1MDB, arguing that the performance of the bonds is impossible to track due to the fact that they are privately issued and not rated.

The PKR vice-president added that even if the bonds came with prime land from 1MDB’s land bank as collateral, neither LTH nor PNB are capable of unlocking the land’s actual value as they lack the expertise required to push high-end property developments.

“Land on its own does not have much value, because it cannot be unlocked. That’s the problem with 1MDB now, it was given very high value land in Jalan Tun Razak and Bandar Malaysia but this land is almost worthless unless you have a large sum of money to develop these lands and unlock their value.

“Even if 1MDB cannot pay the RM1.5 billion and these lands are transferred to LTH and PNB, it remains a land bank. Which means LTH and PNB have to source for huge funds to develop the land, and then you can unlock the value,” Rafizi said.

Last week, reports of LTH’s controversial land investment hit media headlines after it was revealed that it bought a plot of land in the Tun Razak Exchange (TRX) about a month back from 1MDB, which is currently saddled with a RM42 billion debt.

A blog called “The Benchmark” first raised speculation on the purchase when it published purported documents of the controversial transaction that critics now claim could be a bailout for 1MDB.

The expose sparked outrage among lawmakers from both sides of the political divide, including even Umno leaders like Tan Sri Muhyiddin Yassin, Datuk Seri Hishammuddin Hussein and Khairy Jamaluddin, and fueled concerns raised previously over 1MDB’s dealings.

Civil service pension fund Kumpulan Wang Amanah Pencen (KWAP) has since reportedly agreed to buy a parcel of land and building that will be turned into its new headquarters at the TRX at a price which is 15 per cent cheaper than LTH’s purchase.

According to a report by The Star Online, KWAP pay between RM1 billion and RM1.2 billion for a 40-storey building and land at the TRX in Kuala Lumpur.

Quoting sources, the report said that KWAP will be purchasing the land at about RM2,300 per sq ft.

In comparison, LTH reportedly paid RM188.5 million at RM2,773 psf for its part of the TRX land, which is 43 times what 1MDB paid four years ago when it purchased the plot for just RM4.5 million at a rate of RM64 psf.

Copyright © 2016 | Malay Mail Online

Ambank Group shakeup in January due to RM2 billion loan to 1MDB, claims PKR

BY EILEEN NG

Published: 3 March 2015 1:06 PM | Updated: 3 March 2015 3:56 PM




PKR has charged today that the departure of Ambank Group Berhad (AMMB)'s group managing director Ashok Ramamurthy in January was related to a deal with controversial 1Malaysia Development Berhad (1MDB).

Party secretary-general Rafizi Ramli, at a press conference today, claimed that his resignation was allegedly due to a RM2 billion loan given to the strategic investment fund's Bandar Malaysia property development project.

Citing information from a "whistleblower", he claimed Ashok resigned on January 21 after Bank Negara Malaysia (BNM) conducted a compliance audit on the banking giant and discovered a few "irregularities" related to the loan.


He also alleged that besides Ashok, two other senior officials have also resigned.



Commending the central bank's move, Rafizi said, "this raises the question on other banks which have granted loans to 1MDB".

"Bank Negara Malaysia must expose other compliance audits on all local banks which have given loans to 1MDB to enable Members of Parliament and the public to evaluate how 1MDB loans affect the stability of the country's banking sector," he said at PKR headquarters.

Late January, AMMB announced that Ashok Ramamurthy will be stepping down as group managing director and resume his career in a senior executive role at Australia and New Zealand Banking Group Limited (ANZ).

It said the departure is part of a planned transition that will see him rejoin his family in Melbourne, Australia.

Ashok joined AmBank Group from ANZ in 2007, first as CFO before becoming group managing director in 2012.

ANZ is one of AMMB's largest shareholders.

It also denied media reports that its managing director of wholesale banking, coverage Pushpa Rajadurai, managing director of wholesale banking, products Kok Tuck Cheong and group CFO Mandy Simpson would be resigning, saying that the trio "have existing contracts and are continuing to serve the group in accordance with these contracts as normal."

Besides the RM2 billion loan from AMMB, 1MDB has also taken loans from other financial institutions, such as Maybank, RHB Bank and Standard Chartered Bank.

Rafizi today warned the amount of loans 1MDB has taken from the local banks will pose a systemic risk to the entire banking sector.

"When 1MDB takes short terms loans of between six months to one year, it would not be reported fully in financial statements, so it is important for us to see all compliance audits done by Bank Negara so that the public, analysts and financial sector can judge 1MDB's debt levels and whether it will pose a systemic risk on the banking sector," he said.

The Pandan MP added he had submitted parliamentary questions on the matter to the finance minister and expressed hopes that it would be answered at the coming parliament sitting that is due to start next week. – March 3, 2015

06-01-2016

Further Clarification on Bandar Malaysia Equity Sale

Further Clarification on Bandar Malaysia Equity Sale

1MDB notes that certain questions, queries and concerns have been raised by various parties over the recently announced sale of 60% equity in the Bandar Malaysia project, to the consortium comprising Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corporation (CREC) ("Consortium").

We provide below a detailed explanation, which we trust will conclusively dispel the half-truths and misleading statements made by various irresponsible parties. 

1. Bandar Malaysia Sale - Current Proposed Deal Structure

The Sg Besi land is currently owned by TRX City Sdn Bhd (formerly 1MDB Real Estate Sdn Bhd) and Bandar Malaysia Sdn Bhd. TRX City Sdn Bhd owns 4 (four) plots and Bandar Malaysia Sdn Bhd owns 12 (twelve) plots which collectively make up the acreage of the project.  Both companies are ultimately owned 100% by 1MDB.

The current proposed deal structure, is for a New SPV 1 to be formed, that will directly purchase the land (or indirectly purchase, for example through a New SPV 2 or through purchase of equity in Bandar Malaysia Sdn Bhd). New SPV 1 will ultimately own all 16 plots of the Sg Besi land and develop the Bandar Malaysia project.

New SPV 1 will be owned 40% by 1MDB or Minister of Finance Incorporated (MoF Inc) and 60% by the IWH-CREC Consortium.

The Consortium shareholding is 40% CREC and and 60% IWH.

IWH shareholding is 40% Kumpulan Prasarana Rakyat Johor (KPRJ – Johor State Govt) and 60% Credence Resources (Tan Sri Dato’ Lim Kang Hoo).

So, given the above shareholdings of the various parties the ultimate New SPV1 ownership can be described in the following ways:

A. 40% 1MDB or MOF Inc (should the shares be transferred), 36% IWH and 24% CREC. The ultimate project ownership therefore is 76% Malaysian and 24% Chinese.

OR, in the alternative:

B. 40% 1MDB or MOF Inc (should the shares be transferred), 22% Credence Resources, 14% KPRJ and 24% CREC. The ultimate project ownership is therefore 54% Government and 46% private sector (Government: Federal 40% via 1MDB/MOF Inc and State 14% via KPRJ. Private sector: 22% Credence Resources and 24% CREC).

2. Difference in announced values RM7.41 billion (1MDB) vs RM5.3 billion (CREC)

In essence, 1MDB are selling land, which is what we own. However, there are two liabilities indirectly linked to the land i.e.:

A. Remainder costs to complete relocation of Pangkalan Udara KL (PUKL Relocation)

• The main relocation contract and development agreement was executed between 1MDB and the Government of Malaysia for a contract value of approximately RM2.7 billion. This cost includes, amongst others, new land acquisition costs, construction costs, fit out/equipment costs and relocation costs.
• 1MDB in turn, contracted to what was then named 1MDB Real Estate Sdn Bhd (now renamed TRX City Sdn Bhd) for certain construction aspects of the PUKL Relocation. TRX City Sdn Bhd in turn, then contracted Perbadanan Perwira Hartanah Malaysia (PPHM, which is a 100% subsidiary of Lembaga Tabung Angkatan Tentera) as a Turn Key contractor to deliver the construction aspects of the PUKL Relocation.
• PPHM has, in turn, appointed over 50 qualified Bumiputra contractors as sub-contractors to deliver various aspects of the construction. The remaining construction costs plus variation orders plus other costs of the PUKL Relocation are currently estimated at up to RM1.9 billion.
• It is important to highlight that PPHM as the Turn Key contractor and the over 50 Bumiputra subcontractors will continue to remain as the designated contractors and will continue to perform their roles exclusively, regardless of the final deal structure.
• These contractors have been approved by the relevant authorities and construction is supervised by relevant officials from the Ministry of Defence and Ministry of Home Affairs. As the construction will continue to be carried out by the current approved contractors, there is therefore no question of any impact on national security through the sale by 1MDB of its 60% interest in the Bandar Malaysia project.

B. The Bandar Malaysia Sukuk (Sukuk) – this debt is at Bandar Malaysia Sdn. Bhd. (Nominal Value RM2.4 billion at maturity, accrued value approximately RM1.63 billion at 31 December 2015)

3. Final Purchase Consideration Determination

To determine the final purchase consideration to be received by 1MDB, the starting point, as agreed in the Share Sale and Purchase Agreement (SSA) executed between 1MDB and the Consortium, is 100% of the land value = RM12.35 billion.

• For its 60% share, the Consortium has agreed to pay RM7.41 billion (Purchase Consideration), of which a 10% deposit of RM741 million is payable upon execution of the SSA.
• Whilst it is the intention of 1MDB and the Consortium to transfer the remainder PUKL Relocation construction costs and the Sukuk debt to the New SPV 1 (which will be owned 40% by 1MDB/MOF Inc and 60% by Consortium), the transfer will require:

1. determination and agreement between the parties of the final costs for the PUKL Relocation and the Sukuk and;
2. all relevant consents, including but not limited to, from the Government of Malaysia, the contractor (PPHM) and sukuk investors.

• Should 1MDB and the Consortium agree on the costs and manage to procure the consents, then the Consortium will pay its 60% share of the costs and the Purchase Consideration will be adjusted accordingly, i.e. RM12.35 billion Land Value less RM1.9 billion PUKL Relocation Costs less RM1.63 billion Sukuk Costs = RM8.8 billion of which 60% Consortium share is RM5.3 billion.
• However, if the costs cannot be agreed or the consents cannot be procured, then the Purchase Consideration of RM7.41 billion will be paid in full to 1MDB, who will still be responsible for the costs.
• In either scenario above, the Purchase Consideration of RM7.41 billion to 1MDB does not change, the only difference is whether 1MDB receives the amount in full, then pays for the costs OR whether the Consortium pays for its share of the costs and remits the balance of RM5.3 billion to 1MDB.

4. High Speed Rail Project

Whilst the Government of Malaysia has designated Bandar Malaysia as the terminus for the KL – Singapore High Speed Rail (HSR) project, the sale of equity in the Bandar Malaysia project is not in any way linked to the eventual award of the HSR project, nor has 1MDB or the Government of Malaysia made any representations or agreements to that effect. 1MDB and the Consortium both confirm that HSR is an entirely separate project, whose award will  ultimately be determined jointly by the Governments of Malaysia and Singapore, per a separate process, that is and will not be linked or be contingent on, in any way, to the sale of 1MDB equity in the Bandar Malaysia project.